Correlation Between Community Healthcare and PEAK Old
Can any of the company-specific risk be diversified away by investing in both Community Healthcare and PEAK Old at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Community Healthcare and PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Healthcare Trust and PEAK Old, you can compare the effects of market volatilities on Community Healthcare and PEAK Old and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Community Healthcare with a short position of PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Healthcare and PEAK Old.
Diversification Opportunities for Community Healthcare and PEAK Old
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Community and PEAK is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Community Healthcare Trust and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old and Community Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Community Healthcare Trust are associated (or correlated) with PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Community Healthcare i.e., Community Healthcare and PEAK Old go up and down completely randomly.
Pair Corralation between Community Healthcare and PEAK Old
If you would invest 1,730 in Community Healthcare Trust on August 28, 2024 and sell it today you would earn a total of 130.00 from holding Community Healthcare Trust or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Community Healthcare Trust vs. PEAK Old
Performance |
| Timeline |
| Community Healthcare |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community Healthcare and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community Healthcare and PEAK Old
The main advantage of trading using opposite Community Healthcare and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Healthcare position performs unexpectedly, PEAK Old can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PEAK Old will offset losses from the drop in PEAK Old's long position.| Community Healthcare vs. Global Medical REIT | Community Healthcare vs. National Health Investors | Community Healthcare vs. Healthpeak Properties | Community Healthcare vs. Sabra Healthcare REIT |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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